Technology Spawns Wealth

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Originally published in December 1997:

Writing this newsletter is a chore some months, but I have found a way to make it easier and probably even more informative. The technology of the internet allows linking to other sites written by those who have done research that I don’t have the time or resources to delve into.

As for the markets, I see them headed higher soon. December should be a good month since pessimism and fear seem fairly high. Longer term, prospects for the equity markets also appear excellent since inflation remains benign despite a healthy job market.

Technology Spawns Wealth

As John Templeton likes to say, there are more scientists alive today than throughout the history of mankind. When you take this fact and couple it with the statistic that computer memory (a great tool for scientists) is growing at a 67 percent annual rate you begin to realize that we live in an unprecedented era, which should result in unprecedented valuations for companies. For a better understanding of developments occurring, the Scientific American website at http://www.sciam.com/index.html is recommended reading.

Roth IRA is the Best Deal to Come Around in a Long Time

The Roth IRA, if you haven’t heard, will allow most middle class Americans to save money, tax deferred, in an account and then withdraw the money tax-free when they retire. This is an incredible deal which nearly everyone who is eligible should take advantage of. There is a very informative site located at http://www.rothira.com/ which contains many links that will answer questions regarding this new tax shelter.

Portfolio Updates

An amusing and informative article regarding Royal Caribbean (NYSE: RCL; 48) can be found at the Motley Fool site, specifically, http://fool.yahoo.com/fool/97/11/25/double_971125.htm

Recommended Allocations

Aggressive portfolios: 75% equities, 25% cash.

Conservative portfolios: 55% equities, 45% cash.

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